World Technology Usage Lags

NBER Working Paper No. 12677Issued in November 2006NBER Program(s): EFGPR

We present evidence on the differences in the intensity with which ten major technologies are used in 185 countries across the world. We do so by calculating how many years ago these technologies were used in the U.S. at the same intensity as they are used in the countries in our sample. We denote these time lags as technology usage lags and compare them with lags in real GDP per capita. We find that (i) technology usage lags are large, often comparable to lags in real GDP per capita, (ii) usage lags are highly correlated with lags in per-capita income, and (iii) usage lags are highly correlated across technologies. The productivity differentials between the state of the art technologies that we consider and the ones they replace combined with the usage lags that we document, lead us to infer that technology usage disparities might account for a large part of cross-country TFP differentials.

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